LETHBRIDGE: AG sounds timely infrastructure alarm

Auditor general Jacques Lapointe. (ANDREW VAUGHAN / The Canadian Press)

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GAIL LETHBRIDGE

This week’s report from the provincial auditor general is a political canary in the coal mine of Nova Scotia politics and economic development.

Jacque Lapointe’s stern warnings about the declining state of Nova Scotia hospitals, combined with his doubts around the business case for a convention centre, tell a bigger story than the sum of its parts.

This story gives us insights into what happens when government veers away from the fundamentals of providing essential public services and infrastructure and involves itself in the business of real estate speculation.

This week’s report from the auditor general raises the alarm around aging hospital infrastructure and plans to maintain it. At present funding levels, “Nova Scotia’s hospital system cannot be adequately maintained and will continue to deteriorate.”

At the very least, the system needs $600 million. Part of the problem is deferred maintenance due to lack of funding.

As homeowners know only too well, failure to fix a small leak now will only lead to bigger and more expensive problems down the road when you have to replace the entire ceiling.

In the dry language of an auditor general’s report, “failing to maintain capital stock will have significant negative impacts in the long term.”

Now contrast the spectre of crumbling hospitals against the vision of a shiny new convention centre in downtown Halifax.

Three levels of government are spending $163 million on this project in the hope of generating economic spinoffs through increased business tourism traffic. Contracts have been signed and shovels are in the ground. It’s a done deal.

The trouble is, according to the auditor general, “aggressive” projections for growth in convention traffic are not supported with the level of rigorous analysis an accountant would like to see behind this level of expenditure.

Specifically, the projections by Trade Centre Limited do not adequately consider the “excess supply of convention centre space, new competitors, and a stagnant convention centre market.”

According to the auditor’s report: “If the number of visitors expected and resulting direct expenditures are inaccurate, the expected economic impact will likely be inaccurate as well.”

Ouch.

If it has become fashionable to label critics of this government-funded project as “naysayers,” then I suppose we could include the auditor general in that category.

But this “naysayer” is more than just another critic questioning the numbers and analysis used to support this project. The auditor general has a government mandate (not to mention considerable credibility) to dig into these issues on behalf of taxpayers and voters.

So unsettled is he by his findings around business projections for convention centre that he is calling for an independent review of projects made by Trade Centre Limited.

Given Trade Centre’s involvement in the dodgy cash-for-concerts scandal, its history of sloppy management accounting processes (which has since been addressed by Trade Centre) and now these questions raised by the auditor general, there is indeed good reason to question how it developed the business case for the convention centre.

And just because shovels are in the ground, this does not mean that public servants like Lapointe, with a fiduciary responsibility to taxpayers, should just shut up.

But more fundamentally, there is reason to question why all levels of government are spending this kind of money on non-essential real estate infrastructure while this province is facing a looming deficit in essential health-care infrastructure. It’s not like they didn’t know about the health-care crises.

I have no problem with a economically viable convention centre for downtown Halifax. If there is a supportable business case, developers would have to be all over it. This would indeed create spinoffs for local hotels and restaurants. Successful free enterprise does that.

Whether or not “they come,” it is not government’s job to build convention centres. It is the government’s job to build and maintain hospitals, schools, roads and courts of justice.

With our aging population and new criteria for federal health-care transfers, this province will be facing huge challenges in funding and delivering health care.

The money is always finite. If a choice has to be made, I would prefer governments stick to spending tax dollars on essential services and leave the real estate speculation to the private sector.

Gail Lethbridge is a freelance writer in Halifax. On Twitter @giftedtypist